Melbourne’s property market has recorded an unusually busy spate of mid-week auctions, as real estate agents rushed auctions forward to Wednesday to beat the June 30 deadline for stamp duty discounts.
There were 57 auctions listed on Domain on Wednesday, including the sale of a two-bedroom apartment in Camberwell hastily brought forward from Saturday to allow home buyers to take advantage of the 25 per cent stamp duty savings on properties under $1 million.
Stamp duty discounts were introduced by the Victorian government last year to help stimulate the property market during the coronavirus pandemic lockdowns, which banned public auctions for months.
The savings included a 25 per cent discount for existing properties priced under $1 million and a 50 per cent discount for new home builds under the same price threshold.
Anyone who signs a contract of sale for an existing home from July 1 will have to pay the full stamp duty costs.
For an established home worth $1 million, that’s an extra $13,750 in tax.
On Thursday, the Victorian government will also increase the stamp duty on properties that sell for more than $2 million by 1 percentage point for the portion of the price paid over $2 million – from 5.5 per cent to 6.5 per cent.
Real estate agent Luke Saville from The Agency Boroondara decided to bring forward the sale of the ground-floor, two-bedroom apartment at 6/105 Wattle Valley Road in Camberwell, to allow the interested buyers to take advantage of the stamp duty savings.
“It was due to go to auction on Saturday, but we received an offer well above the $600,000 reserve on Tuesday, from a couple who were keen to save the 25 per cent on their stamp duty and from there we had other buyers say, ‘Well, we’d like to compete with that and capitalise on the savings before Thursday too,’” he explained.
The decision to move the auction forward paid off, with nine registered bidders attending the hastily arranged online auction at 10am on Wednesday, including four active bidders, who pushed the final selling price to $723,000 – $123,000 above the reserve.
“It was pretty crazy,” Mr Saville said. “The owner was pretty surprised, to be honest … but there was a real desire for people to get in before those stamp duty savings ended.”
Michael Pastrikos from Ray White Southbank was also among the dozens of agents who decided to move auctions forward to Wednesday before the June 30 deadline, scheduling the auction of a three-bedroom Southbank apartment for 6pm on Wednesday.
Mr Pastrikos said the apartment at 36/38 Kavanagh Street was listed for sale just days before Melbourne’s most recent 14-day lockdown and, despite having a shortened sales campaign, he made the decision to hold the auction on June 30 to give buyers the opportunity to save on stamp duty.
“The sales campaign for this property is about a week and a half shorter than what we would normally run because of the lockdown restrictions and then bringing it forward to mid-week,” he said. “But we’ve got some interested buyers, and we thought it made sense to auction it before the stamp duty savings ended.”
With a price guide of $695,000 to $765,000, holding the auction on Wednesday night gave buyers the opportunity to save 25 per cent on stamp duty.
“If you’ve got the buyers there, and by moving the auction forward they’re going to save on stamp duty, then you’re doing them a favour,” Mr Pastrikos said.
Damian Ponte from Nelson Alexander Brunswick also brought forward an auction originally scheduled for Saturday, July 10 to Wednesday afternoon to enable buyers to save on their stamp duty fees.
The three-bedroom apartment at 1/52 Austral Avenue in Brunswick had a price guide of $770,000 to $820,000.
Mr Ponte said he made the decision on Tuesday to bring the auction forward to Wednesday after receiving a “big offer” earlier in the week.
“The interested buyers were very mindful of the cut-off date for the stamp duty discounts and so once we received the offer we decided to bring the auction forward,” he said.
“A 25 per cent saving is quite a bit of money and so bringing the auction forward to Wednesday gives them that opportunity to save that money in their own pockets rather than give it to the government – or have a bit more to spend at the auction,” he said.
This story first appeared at Domain.
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